A Loan Modification can be a permanent change in a number of with the terms of a Mortgagor's loan, allows the loan to become reinstated, and leads to a payment the Mortgagor can afford.
1: In utilizing the Loan Modification option to bring an asset current, can the Mortgagee include all fees and corporate advances?
Mortgagee Letter 2008-21 states partially: Legal fees and related foreclosure costs for work actually completed and applicable to the present default episode is usually capitalized into the modified principal balance.
2:May a Mortgagee perform an internal inspection of the property if they have concerns about property condition?
Yes, per Mortgagee Letter 2000-05, page 20, the Mortgagee may conduct any review it deems required to verify that the property has no physical conditions which adversely impact the Mortgagor's continued ability to support the modified mortgage payment.
3: Can a Mortgagee include late charges within the Loan Modification?
Mortgagee Letter 2008-21 states how the goal in providing the Mortgagor a Loan Modification is always to bring the delinquent mortgage current and give the Mortgagor a new start, the Mortgagee should waive all accrued late fees.
4: When utilizing a Loan Modification option, can a Mortgagee capitalize an escrow advance for Homeowner's Association fees?
HUD Handbook 4330.1 REV-5 (Paragraph 2-1, Section B, Escrow Obligations) states: Mortgagees must also escrow funds for those items which, if not paid, would create liens on the property positioned prior the FHA-insured mortgage. 5: Is there a new basis interest rate which Mortgagees may assess when completing a Loan Modification?
Yes, Mortgagee Letter 2009-35 states of the fact that Mortgagee shall reduce the Loan Modification note rate to the current Market Rate. Please consult with Mortgagee Letter 2009-35 for more details.
6: Are Mortgagees required to re-amortize the whole amount due over 360 month period?
Yes, per Mortgagee Letter 2009-35, the Mortgagee must re-amortize the entire unpaid amount due over a 360 month period from your due date of the first installment required under the modified mortgage. 7: What date is used when determining the proper interest to get a Loan Modification?
The date the Mortgagee approves the Loan Modification (all verification completed and servicing notes documented, reported to SFDMS) will be the date that Mortgagees are to use in determining the interest rate.
8: Will HUD subordinate a Partial Claim, should a Mortgagor subsequently default and qualify for just a Loan Modification?
If a Mortgagor subsequently defaults and qualifies for any Loan Modification, HUD will subordinate the Partial Claim.
9: Are Mortgagees required to perform an escrow analysis when completing a Loan Modification?
Yes, Mortgagees are to perform a retroactive escrow analysis at when the Loan Modification to ensure that the delinquent payments being capitalized reflect the actual escrow requirements required for those months capitalized.
10: Can a Mortgagee qualify an asset for those Loan Modification option when the Mortgagor is unemployed, the spouse is utilized, but the spouse name just isn't on the mortgage?
Based upon this scenario, the Mortgagee should conduct a financial review of the household income and expenses to see if surplus income is sufficient to fulfill the modern modified mortgage payment, but insufficient to pay back the arrearage. Once this process may be completed the Mortgagee should then seek advice from their legal counsel to determine if the asset is eligible for a Loan Modification since the spouse isn't on the initial mortgage.
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